Mitsubishi Electric's financial troubles have sounded the death knell for Apricot's PC hardware business after a series of strategy realignments failed to make the subsidiary competitive in the global market.
Peter Horne, managing director of Apricot, blamed the parent company's sales model for Apricot's inability to achieve a top 10 ranking in the worldwide PC market.
'One of the aims of Apricot, when it was acquired by Mitsubishi, was to grow internationally. But we soon realised it was predominantly an OEM and retail company and there wasn't really a reseller channel or a direct sales force capable of selling PCs.'
Horne added: 'We have never been a tier-one player so as margins became smaller and competitors such as Compaq and Dell increased market share, it was no longer viable for us to operate profitably. Mitsubishi's financial fortunes have changed for the worse, so its ability to support businesses that aren't profitable has been reduced.'
An estimated 200 staff will be retrenched as a result of Apricot's withdrawal from the PC hardware business which will be finalised by June. About 150 UK resellers have been affected, Horne claimed.
The move out of the PC hardware market comes six weeks after Apricot announced the closure of a motherboard manufacturing facility in Glenrothes, Scotland, and the Mitsubishi PC sales office in Germany, which also cost 200 jobs.
At the time, Apricot launched Metaphorix, a systems integration business specialising in the development and implementation of internet, ERP and call centre software systems. Metaphorix will be Apricot's core business, Horne said. He claimed 500 resellers have registered for Metaphorix software products since Computer 2000 was signed as an exclusive distributor.
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